Worldwide air cargo rates and demand softened slightly from most regions in the second week of July, although tonnages and average global prices remain significantly higher than this time last year, thanks to continuing elevated demand and high rates from Asia and the Middle East.
According to the latest weekly figures and analysis from WorldACD Market Data, worldwide tonnages dropped 1% in week 28 (July 8 to 14), mainly due to falls in Europe (5%), Asia Pacific (2%) and Africa (5%).
The air cargo market data provider noted, however, that a post-Independence Day rebound from North America (6%) origins and from Central & South America (CSA) (4%) helped keep total worldwide tonnages relatively firm during what is normally a quiet month.
On the pricing side, average worldwide rates edged down 1% to US$2.50 per kilo in week 28, with small (1%) declines from Asia Pacific, Middle East & South Asia (MESA), Europe, and CSA origins.
However, it noted that that figure of US$2.50 per kilo is up 11%, year on year (YoY), based on a full-market average of spot rates and contract rates, and remains significantly higher than the equivalent period prior to Covid (up 44% compared to July 2019).
"Combining the figures for weeks 27 and 28 reveals a similar picture on the rates side, with average prices up 11% globally and by 24% and 51%, respectively, from Asia Pacific and MESA origins. However, compared with the previous two weeks (a two-week on two-week or 2Wo2W comparison), rates rose by 2%, thanks to a 3% rise in week 27, week on week (WoW)," WorldACD said.
Spot rate analysis
Meanwhile, the report noted that after last week highlighting some extremely high spot rates from various Asia Pacific origins to Europe and to the US in week 27, WorldACD's data reveals that average spot prices eased off slightly in week 28 from some East Asia origin markets to Europe, dropping 16% from Thailand and 11% from Taiwan, to US$2.65 and US$3.65 per kilo, respectively.
Average spot rates from China to Europe slipped back slightly for the third consecutive week. However, there were further increases from Hong Kong (7%), South Korea (5%) and Japan (3%) origins to Europe, despite ann 8% fall in tonnages from Hong Kong, WoW.
Meanwhile, spot rates from Asia Pacific origins to the US were fairly stable in week 28, including from China, but they remain well up compared with the equivalent week last year (up 63% and 38%, YoY, respectively)
"Elsewhere, the highly elevated tonnages and price levels from various MESA origins to Europe seem set to persist into the second half of 2024, as the attacks on container shipping in the Red Sea continue to cause vessel diversions from the region," WorldACD said.
It added that overall air cargo demand from MESA to Europe decreased by 7% in week 28, driven mainly by declines in tonnages from Dubai (17%) and India (7%). However, all three remain up substantially compared with this time last year (17%, 82% and 16%, respectively, YoY).
On the pricing side, the report said the increases compared with last year are even more pronounced, with average MESA to Europe spot rates of US$3.25 a kilo in week 28, standing more than double (126%) their level last year and falling just slightly (1%) compared with the previous week.
India to Europe spot rates of US$3.49 a kilo in week 28 have fallen somewhat from their highs of more than US$4 a kilo three months ago, but they are dramatically up (158%) on last year's levels.
WorldACD said, meanwhile, Bangladesh to Europe spot prices held firm in week 28 at US$4.25 a kilo, although they have dropped back from levels of more than US$4.60 for several weeks in April and May.
